CORP SNAPSHOT: Trio emerge from pipeline

IG corporate supply is being limited to three pipelined trades on Tuesday following a complete blank on Monday seen amid a tech sell-off.

Interestingly enough, one of the day’s issuers is American-Irish tech company Tyco Electronics (EUR 8yr SEC-registered benchmark), which is getting the week’s euro supply up-an-running along with Severn Trent Utilities (EUR 10.5yr sustainable benchmark).

That duo have gone live amid a more upbeat broader market tone this morning, whilst National Gas Transmission has also emerged from the pipeline with a GBP 9yr line.

Tyco Electronics makes euro return

** American-Irish domiciled technology company TE Connectivity Ltd (A3/A-/A-) hired BofA Securities, Citigroup, and J.P Morgan to arrange a series of fixed income investor calls to take place on 27-Jan. A EUR 8yr SEC-registered benchmark transaction is now live

IPTs: Books open for Jan 2033 benchmark at m/s +120-125

• The notes will be issued via the company’s Luxembourg-headquartered subsidiary Tyco Electronics Group S.A and will be fully and unconditionally guaranteed by TE Connectivity plc and TE Connectivity Switzerland Ltd
• The company intends to use the net proceeds from this offering for general corporate purposes, which may include the repayment of outstanding debt. On that note, the new deal comes just ahead of the maturity of a EUR550m 0% ex-5yr bond on 14-Feb
• TE hasn’t issued euro paper since printing EUR550m 0% Feb 2029s in 2021, at m/s +40 on demand that settled at EUR2.2bn. That line was spotted on the official comps list sent Monday at i +68 bid along with the company’s dollar bonds and the euro curves of similar-rated peers
• Given the absence of an existing euro curve for the borrower, fair value for the new deal is fairly subjective, but building out from the Feb 2029s we saw it somewhere in the region of m/s +85-90

€€€ TE Connectivity (A3/A-) - Indicative Pre-Announce Comps €€€

(Bid side vs I-Sprd)

Issuer Ratings (M/S&P) Size Coupon Maturity Tenor (yrs) Spread

TEL A3/A- € 550m 0.000 Feb-29 4.1 +68

TEL A3/A- $ 350m 4.625 Feb-30 5.1 G+53 / €ms+61 eq.

TEL A3/A- $ 600m 2.500 Feb-32 7.1 G+60 / €ms+77 eq.

** Single-A Industrials Comparables **

(Bid side vs I-Sprd)

Issuer Ratings (M/S&P) Size Coupon Maturity Tenor (yrs) Spread

ITW A1/A+ € 850m 3.375 May-32 7.3 +78

ATCOA -/A+ € 500m 0.750 Feb-32 7.0 +72

DE A2/A € 900m 3.450 Jul-32 7.5 +79

SUFP A3/A € 600m 3.500 Nov-32 7.8 +70

SUFP A3/A € 500m 3.500 Jun-33 8.4 +72

SUFP A3/A € 600m 3.375 Apr-34 9.2 +75

ABBNVX A3/A- € 750m 3.375 Jan-31 6.0 +63

ABBNVX A3/A- € 750m 3.375 Jan-34 9.0 +75

LRFP -/A- € 600m 3.500 Jun-34 9.4 +88

ASSABS -/A- € 600m 3.875 Sep-30 5.6 +74

ASSABS -/A- € 600m 4.125 Sep-35 10.6 +92

ETN A3/A- € 500m 3.601 May-31 6.3 +78

ETN A3/A- € 500m 3.802 May-36 11.3 +108

Severn Trent to create EUR sustainable curve

** Severn Trent Utilities Finance Plc (Baa1/BBB+/BBB+), the financing subsidiary of Severn Trent Water Limited, one of the largest water and sewerage companies in England and Wales, mandated MUFG, NatWest Markets, Santander and Scotiabank as Active Bookrunners to arrange a series of fixed income investor calls commencing on 27-Jan. A EUR 10.5yr senior unsecured sustainable long benchmark offering is now live

IPTs: Books open for Aug 2035 sustainable benchmark at m/s +180 area

• The notes are expected to be rated Baa1 / BBB+ / A- by Moody’s, S&P and Fitch
• An amount equal to the net proceeds from the issue will be allocated by the issuer to Eligible Sustainable Investments as set out in the Group’s Sustainable Finance Framework, which for this issuance will fall within Green Eligible Categories
• Severn Trent has just one euro outstanding, namely a EUR600m 4% Mar 2034 sustainable line launched last year, with that included on the official comps list at i +133 bid versus the reoffer of m/s +125
• Equating for the additional tenor from the borrower’s only existing bond, we saw fair value for the new Aug 2035 sustainable in the m/s +low 140s area

€€€ Severn Trent Utilities Finance – Comparables €€€

Security Ratings Outstanding (€MM) Issue Date Tenor Bid I+ ESG

SVTLN 4 03/05/34 BBB+/Baa1/A- 600 Mar-24 9.1 133 Y

SSELN 3 3/8 09/04/32 BBB+/Baa1/- 850 Sep-24 7.6 105 Y

CDTFIN 3 3/4 04/16/33 BBB/Baa1/A- 640 Apr-24 8.2 132 Y

UU 3 3/4 05/23/34 BBB+/A3/A- 825 Feb-24 9.3 134 Y

NGGLN 4.275 01/16/35 BBB/Baa2/BBB 1000 Jan-23 10 138 -

National Gas Transmission to offer sterling option

** UK utility National Gas Transmission plc (Baa1/BBB+) mandated ABN AMRO, Credit Agricole CIB, HSBC and NatWest Markets as Active Bookrunners to arrange a series of fixed income investor calls on 27-Jan. A GBP 9yr senior unsecured bond offering is now out

IPTs: Books open for GBP Feb 2034 benchmark at gilts (UKT 4.625% Jan 2034) +130 area

• The notes are expected to be rated Baa1 by Moody’s and A- by Fitch
• Proceeds will be used to buy back outstanding inflation-linked debt, and for general corporate purposes
• To help gauge fair value for the new line, leads highlighted the company’s most recently issued 1.125% Jan 2033 and 5.75% Apr 2035 bonds launched in 2021 and 2023 respectively. Both of those were GBP250m in size and were trading at gilts +99 and +104 bid respectively ahead of the new line
• Interpolating those would put fair value for the new 9yr in the context of gilts + low 100s

Indicative pre-announce bid side levels vs gilts

* Comparables *

Ticker Rating Cpn(%) Issue Dt Mty Dt Tenor Amt(£m) G+(bid)

NGTRAN Baa1/NR/A- 1.125 Jan-21 Jan-33 8.0y 250 99

NGTRAN Baa1/NR/A- 5.750 Apr-23 Apr-35 10.2y 250 104

In the pipeline

** Australian electricity distributor Ausgrid Finance Pty Ltd (Baa1/BBB) hired BNP PARIBAS, BofA Securities, Credit Agricole CIB and ING to arrange a series of fixed income investor meetings and calls commencing from 27-31 Jan. Subject to market conditions, a EUR 8yr benchmark senior secured transaction may follow. Comps here

Performance tracker of recent EUR IG/split-rated benchmark deals

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